Eskom Holdings Ltd producer of 95% of South African power plans to revise deals with coal mine operators including BHP Billiton Ltd and Anglo American Plc to secure supplies amid a surge in competing Indian demand.

Eskom has begun talks to spur suppliers to accept prices at efficient cost, plus fair returns, Chief Commercial Officer Dan Marokane said that “About 525 million tons could be at risk from competition with exports, threatening to make electricity charges unaffordable.”

State run Eskom delivers power to Xstrata Plc’s ferrochrome furnaces, AngloGold Ashanti Ltd’s gold mines and BHP’s aluminum smelters in South Africa. The utility, one of the 10 largest in the world by capacity, has struggled to fund a ZAR 485 billion (USD 68 billion) expansion program to prevent a repetition of the power blackouts that hit mines, factories and cities in 2008.

Mr Marokane said that Eskom will seek to persuade coal suppliers to accept new terms by reducing the risk of rising output costs for the mine operators. He said that the terms would apply after 2018 as Eskom already has contracts or commitments for about 95% of supply until then.

(Sourced from Bloomberg)